Study: Paying for Transgender Health Care Cost-Effective

Most health insurance plans do not cover care associated with transitioning to the opposite sex

A new analysis led by the Johns Hopkins Bloomberg School of Public Health suggests that while most U.S. health insurance plans deny benefits to transgender men and women for medical care necessary to transition to the opposite sex, paying for sex reassignment surgery and hormones is actually cost-effective.

The researchers, reporting online in the Journal of General Internal Medicine, say that the cost of surgery and hormones is not significantly higher than the cost of treatment for depression, substance abuse and HIV/AIDS, all of which are highly prevalent in those who are transgender but are not in a position to medically transition to the opposite sex. In 2014, the Center for Medicare and Medicaid Services began paying for sex reassignment surgery and other transitional care, after a 33-year-ban on covering those costs was lifted.

Providing health care benefits to transgender people makes economic sense,” says study leader William V. Padula, PhD, MS, MSc, an assistant professor of health policy and management at the Bloomberg School. “Many insurance companies have said that it’s not worth it to pay for these services for transgender people. Our study shows they don’t have an economic leg to stand on when they decide to deny coverage. This is a small population of people and we can do them a great service without a huge financial impact on society.”

Providing health care benefits to transgender people makes economic sense,” says study leader William V. Padula, PhD, MS, MSc, an assistant professor of health policy and management at the Bloomberg School. “Many insurance companies have said that it’s not worth it to pay for these services for transgender people. Our study shows they don’t have an economic leg to stand on when they decide to deny coverage. This is a small population of people and we can do them a great service without a huge financial impact on society.”

Estimates vary widely but it is believed that between 3,000 and 9,000 Americans undergo sex reassignment surgery each year. Transition medical care can include hormone replacement therapy, mastectomy, plastic surgery, psychotherapy and more.

For their study, Padula and colleagues analyzed data from the 2011 National Transgender Discrimination Survey, which includes information on access to medical care and health outcomes, as well as the Healthcare Bluebook, which outlines the cost of medical services. They also looked at previously published research on the topic.

When determining cost-effectiveness of medical services in the U.S., policymakers consider something cost-effective if the price is below $100,000 per year of quality of life. In the first five years, the researchers found, providing health care for transgender people cost between $34,000 and $43,000 per year of quality of life; after 10 years, the cost dropped to between $7,000 and $10,000 per year of quality of life.

Padula likens the case of paying for transgender care to caring for people with rare diseases. For example, cystic fibrosis affects just 30,000 people in the United States but can be treated as a chronic condition with the availability of new medications at a cost of $300,000 per year. While this is neither cost-effective nor individually affordable, Padula says, society has decided to pay for the treatment out of compassion. The same can be done for transgender people, he says.

Health insurance policies also pay for treatments that can be considered elective, such as breast reduction and spinal fusion as well as medication for erectile dysfunction. Some employers and health insurance companies do offer at least one plan that covers transition care, but that is not the norm, Padula says.

“Most U.S. health insurance policies still contain transgender exclusions, even though treatment of gender identity disorder is neither cosmetic nor experimental,” he says.

The new analysis calculated that the cost to cover transgender people would be fewer than two pennies per month for every person with health insurance coverage in the United States.

“We would be paying a very small incremental amount to improve the quality of life for a population that is extremely disenfranchised from health care and other services we consider a right,” Padula says. “For this small investment for a small number of people, we could improve their lives significantly and make them more productive members of society.”

He says that providing sex-reassignment surgery and other services to transgender people could help mitigate the expenses of treating depression, which often occurs in people who cannot transition, often because they do not have the financial means, as well as drug abuse and HIV/AIDS.

He says that providing sex-reassignment surgery and other services to transgender people could help mitigate the expenses of treating depression, which often occurs in people who cannot transition, often because they do not have the financial means, as well as drug abuse and HIV/AIDS.

Funding for this study includes an F32 National Research Service Award from the Agency for Healthcare Research and Quality, a University of Chicago Medicine Small Grant in Diversity Research and a merit fellowship from Western New England University School of Law in affiliation with the Gender and Sexuality Center.

About Author

Wynternight is the nom de plume of an Alaskan woman who loves the long, cold, and dark Alaska Winters. She's a fan of movies, music of all kinds and by all kinds she means metal, and various TV shows. She writes fantasy, sci-fi, and horror fiction of dubious quality and hopes to figure out what she wants to do when she grows up. Right now she works as a nurse, which she enjoys, but would much rather make a living as a black metal vocalist and guitar player.

1 Comment

– ‘We ensure that surgery is not experimental, elective, investigational, or optional cosmetic procedure but as medically indicated, necessary, and appropriate treatment to maximise the overall psychological well-being.’

The cost of initiation and maintenance is minimal and little different than any other medical circumstance: endocrinological medical appointments every six or 12 months, ERT, a periodic blood draw, counselling according to the patient’s requirements.

The big outlay are one-time expences: FFS, BA, VFS, thyroid shave, laser / electrolysis, GCS / SRS that not all either need, require, or request. Those can be done quite well for less than $100k during the course of transition. Such expences are enormous to the many transitioning patients living at low income through no choice of their own.

Health care discrimination occurs precisely because we are a relatively small number who endure the daily ire of the prejudicial majority of the citizenry and harm from the medical insurance segment of the economy that chooses to bleed us dry. Read community message boards – they are replete with calls to employ all means to hasten our demise.

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